fbpx 46093-004: Inclusive Growth through Improved Connectivity Program, Subprogram 2 | Asian Development Bank

Indonesia: Inclusive Growth through Improved Connectivity Program, Subprogram 2

Sovereign (Public) Project | 46093-004 Status: Closed

ADB is supporting Indonesia's long-term economic master plan (MP3EI) by helping to improve domestic and international connectivity. The program will help accelerate the development of better logistics systems and infrastructure to connect rural areas to urban growth centers, improve international connectivity, and strengthen connectivity coordination and legal and regulatory frameworks.

Project Details

Project Officer
Aji, Priasto Southeast Asia Department Request for information
  • Indonesia
  • Loan
  • Transport
Project Name Inclusive Growth through Improved Connectivity Program, Subprogram 2
Project Number 46093-004
Country Indonesia
Project Status Closed
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 3068-INO: Inclusive Growth through Improved Connectivity, Suprogram 2
Ordinary capital resources US$ 400.00 million
Loan: Inclusive Growth through Improved Connectivity, Suprogram 2
World Bank US$ 300.00 million
Agence Francaise de Developpement US$ 100.00 million
Strategic Agendas Inclusive economic growth
Regional integration
Drivers of Change Partnerships
Private sector development
Sector / Subsector

Transport / Transport policies and institutional development

Gender Equity and Mainstreaming No gender elements
Description The proposed subprogram 2 will support the continuation of reforms on the second strategic pillar of the MP3EI achieved under the first subprogram. The government has implemented further reforms aimed at improving the policy, regulatory, financial, institutional, and business climate frameworks for connectivity and infrastructure development. A stronger enabling environment for domestic and international connectivity will in turn enable increased infrastructure investments by the public and private sectors to support sustainable higher and more inclusive economic growth. Now there is increased urgency to accelerate implementation of these reforms to accelerate connectivity improvement and infrastructure development in general as economic growth has started to slowthe protracted nature of the recovery of the global economy.
Project Rationale and Linkage to Country/Regional Strategy Indonesia recorded strong economic growth averaging around 6% in the last six years. Despite this achievement, a number of studies suggest that the economic growth is still below the country's potential. Indonesia also made significant strides in reducing poverty as itsincidence declined from 16.6% in 2007 to 12% in 2012. At the same time, although poverty incidence is declining, the country experienced a steady rise in inequality; as shown by an increasing Gini coefficient. The government's long-term Master Plan for Acceleration and Expansion of Indonesia's Economic Development, 2011- 2025 (MP3EI) targets to achieve higher and more inclusive economic growth based on three pillars strategy: (i) spreading economic development across the country through development of six economic corridors, (ii) improving domestic and international connectivity, and (iii) enhancing technology and human resources. The MP3EI includes regulatory reforms as an integral step in accelerating economic development.
Impact Reduced Transport and Logistics Costs
Project Outcome
Description of Outcome Better Developed Domestic and International Connectivity
Progress Toward Outcome
Implementation Progress
Description of Project Outputs

Connectivity Coordination and Regulatory Framework Strengthened

Key Initiatives to Upgrade Intra-island Connectivity Implemented

Measures and Strategy to Improve Inter-island Connectivity Put in Place

Key Policies Executed to Enhance International Connectivity

Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location Nation-wide
Safeguard Categories
Environment C
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects Implementation of the program will not have environmental impact
Involuntary Resettlement The program will not entail any land acquisition and/or physical and economic displacement of people
Indigenous Peoples The program will not benefit or negatively impact indigenous people
Stakeholder Communication, Participation, and Consultation
During Project Design The overall program supports the government's efforts in four core reform areas. ADB and other development partners develop the program in close consultation with the government's Connectivity Working Group and other stakeholders. The policy actions were developed to ensure consistency with the government's development efforts and initiatives, as outlined in the RPJMN 20102014 and the MP3EI 2011-2025. After completing all the core policy actions under subprogram 1 in mid-September 2012, the government made significant progress in implementing core policy actions for subprogram 2.
During Project Implementation The government has formed a steering committee, chaired by the vice-minister of BAPPENAS, with senior representatives of the implementing agencies and development partners (ADB, Japan International Cooperation Agency, and the World Bank) as members. The committee meets semi-annually to review and confirm attainment and compliance with policy actions and to provide overall guidance on the implementation of the reform agenda under the Program. The committee works with the connectivity working group, which is also chaired by BAPPENAS and responsible for coordinating the implementation of the government's connectivity reform agenda under MP3EI.
Business Opportunities
Consulting Services Not required
Procurement Not required
Responsible ADB Officer Aji, Priasto
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Indonesia Resident Mission
Executing Agencies
National Development Planning Agency (BAPPENAS)
[email protected]
Jl. Taman Suropati No. 2
Jakarta 10310
Concept Clearance 25 May 2012
Fact Finding 18 Apr 2013 to 26 Jun 2013
Approval 27 Nov 2013
Last Review Mission -
Last PDS Update 02 Apr 2014

Loan 3068-INO

Approval Signing Date Effectivity Date Closing
Original Revised Actual
27 Nov 2013 29 Nov 2013 18 Dec 2013 31 Mar 2014 - 03 Feb 2014
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 800.00 Cumulative Contract Awards
ADB 400.00 27 Nov 2013 400.00 0.00 100%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 400.00 27 Nov 2013 400.00 0.00 100%

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